Limit the right of separation of the minority partner! The right of separation of the partner in case of lack of distribution of dividends (Article 348 to LSC). The possibility of limitation or elimination of the right via statutory modification.

The controversial article 348 twice from Capital Companies Law (LSC) has given rise to an extensive discussion doctrinal since it was introduced in the Capital Companies Law by the Law 25/2011, from 1 of August. Even jurisprudence has not been able to unify the criteria in its application. One of the causes of so much controversy, was the problem that this right of separation could generate to the societies that, at the time of being exercised by the minority partner, they did not have sufficient liquidity to meet the required payment and that therefore compromised the future of society itself.

Faced with this situation and after several comings and goings, having even been suspended its application for a long period of time, the legislator decided to modify the diction of the article in the last reform carried out by the Law 11/2018 from 28 December and that came into effect on 30 from December to 2018.

The reform introduces several novelties, thus trying to correct the deficiencies that the previous wording of the article presented. But without any doubt, the most important novelty is possibility of limiting or eliminating through statutory modification the right of separation due to lack of distribution of dividends. This is, the possibility of resignation of the partners to this right is contemplated for the first time.

For the resignation or limitation of the right of separation due to lack of distribution of dividends, the law contemplates two possibilities:

• Unanimity in the vote in favor of the statutory modification.
• Sufficient majority to approve the statutory modification, as long as the partners who have not voted in favor of said modification are recognized the right to separate.

Definitely, the reform of the article 348 bis of the LSC introduces a new right of separation in the case of limiting the right of separation of the partner in the event of no distribution of dividends.

This novelty, has a special significance for newly created companies, that thinking about the future of society will contemplate from the beginning of the corporate life the limitation of this right.